3. Officials from the county and Envy City have asked you to look into the share

Question

3. Officials from the county and Envy City have asked you to look into the share they contribute and receive. The current tax rates are 4.9 percent state and 1 percent local. Based on the tax rates in effect for each given year, the table below presents annual collections for the state retail sales tax in the county, the county retail sales tax, the county's share of the county retail sales tax, and Envy City's share of the county retail sales tax. Note that the differ- ence between the county total and the county share and the city share is the amount distributed to smaller jurisdictions in the county. Estimate revenues for each of the jurisdictions for years 16 and 17 using any method that is ap propriate. What did you find Annual Sales Tax Collections in the Coun City Share 9,959,471 $22,710,686 County Share State 91,559,841 County Total $22,327,240 ear 1987 1988 $119,091,013 $36,951,283$10,491,740 $23,685,829 1989$126,432,841 1990 $133,774,668 $40,591,631 1991 38,771,457 $12,012,747$24,920,636 12,529,542 $25,227,035 146,766,113 $42,143,664$13,831,022 $26,304,536 1992 $151,665,708 $44,432,753$14,173,409 $26,742,910 993 $161,705,948 $46766,184 $14,999,622 $24,978,593 1994 $214,192,348 $50,851,852 $16,652,206 $31,627,266 1995 $208,850,276 $53,731,178 $17,501,364 $33,065,939 1996 $205,977958 $56,555,442$18,097,026$32,477.282 1997 $212,062,264 $55,903,696 $18,450,964 $34,266,021 1998 $226,953,301 $59,219,913 $19,677 473$36,237,219 1999 $241,115,267 $64,649,274$22,773,689 $38,344,037 2000 $249,473,032 $66,525,507$22,265,83 $38,008,578 2001 $243,460,732 $65,194,997 $21,501,227 $38,541,342

Explanation / Answer

Using Excel, we can analysis the regression model and give the output as follows

The regression model is

R = 92394498+ 11226365*T

to estimate revenues for years 16 and 17 is

R = 92394498+ 11226365*16 =272016338

R = 92394498+ 11226365*17= 283242703

SUMMARY OUTPUT Regression Statistics Multiple R 0.973913 R Square 0.948506 Adjusted R Square 0.944545 Standard Error 12139639 Observations 15 ANOVA df SS MS F Significance F Regression 1 3.53E+16 3.53E+16 239.4555 9.4E-10 Residual 13 1.92E+15 1.47E+14 Total 14 3.72E+16 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 92394498 6596172 14.00729 3.2E-09 78144335 1.07E+08 TIme 11226365 725482.2 15.47435 9.4E-10 9659056 12793674

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